In the U.S. Department of the Treasury's first action against a foreign-located money services business, the Financial Crimes Enforcement Network ("FinCEN") fined BTC-e, a foreign-based digital currency exchange, for violations of anti-money laundering ("AML") regulations. In addition, the Department of Justice unsealed a criminal money laundering indictment against the company and its president, who was arrested yesterday in Greece.
According to the indictment, FinCEN alleged that BTC-e, its president, Alexander Vinnik, and others developed a customer base for BTC-e that relied heavily on criminals and was operated to facilitate transactions for cybercriminals. The indictment also alleged that BTC-e, which did substantial business in the United States, was used to facilitate crimes ranging from computer hacking to drug trafficking. The investigation also revealed that BTC-e received more than $4 billion worth of bitcoin over the course of its operation.
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